I enjoy roller coasters, but not in my trading. The unemployment rate was reported lower by 0.3% just as the market opened, but another 200k jobs were lost in January. That report just piled onto the concerns raised yesterday about the financial instability of several European countries and the markets traded lower all day. However, about an hour before the close of trading the dollar started weakening and the markets bounced back strongly and actually ended in gains for the major indexes. RUT closed up $3 at $593 after trading as low as $580 and the SPX dipped to $1044 before closing at $1066, up $3. What a swing!

The weakness in the markets this morning prompted me to do some major surgery on my positions (imagine my surprise toward the end of the market today). I closed the 560/570 put spreads in my Feb iron condor for $2.52 and opened 20 contracts of the Feb 530/540 put spreads for $1.03. As the market reversed itself toward the end of the day, I sold the Mar $580 put for $16.40. The end result of all of this was a Feb iron condor at 540/550 and 640/650 with a P/L of +$1,194, delta = +$25 and theta = +$184. This condor now stands almost perfectly at about one and a half standard deviations OTM in each direction.

My Mar iron condor was in even more fragile condition, so I completely restructured it as well (but no jobs were lost). I sold the Apr 570 puts for $21.80, closed the 560/570 puts for $3.10 and opened 520/530 puts for $1.15. I also closed the 670/680 calls for $0.30 and rolled down to 640/650 for $1.05. It is worth noting that a conservative trader could have simply thrown in the towel this morning and closed this Mar condor for a net loss of about $100. Thus, another reminder that trading the iron condor can be profitable without enduring large losses if you manage the risk properly. The new position at 520/530 and 640/650 now stands at a P/L of -$500, delta = -$38 and theta = +$100. The new call position is now right at one standard deviation OTM, much closer than I anticipated this morning when I rolled down. When this happens to you, repeat the mantra, "I played what the market gave me; I didn't try to predict what was coming". Don't second guess yourself.